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Countrywide's Mozilo Settles SEC Charges for $67.5M

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By Tanya Roth, Esq. on October 27, 2010 9:46 AM

Is it the one of the highest penalties levied on an single person by the SEC, or is it merely a slap on the wrist with no deterrent effect for upcoming generations of potential white collar criminals? Depends on who you ask. One thing that is certain: former Countrywide Financial CEO Angelo Mozilo will be paying a sizable chunk of his fortune in a settlement reached recently with the Securities and Exchange Commission.

Time Magazine named Mozilo one of the 25 people most responsible for the financial crisis. By most accounts, it a well-deserved dishonor. According to the Wall Street Journal, Mozilo will pay out $67.5 million in financial penalties for this part in the financial debacle. $22.5 million of the settlement will go to civil penalties and $45 million will be a disgorgement of profits, The Journal reports.

The Journal reported one other element of the settlement that might help American taxpayers sleep better at night: Mozilo has agreed to a permanent ban on serving as an officer or a director of a public company. Mozilo's co-defendants have also settled their cases, with former Countrywide Financial President David Sambol paying $5.5 million and former Chief Financial Officer Eric Sieracki fined $130,000. David Sambol is also banned from serving as an officer of a public company for three years.

Much the way that Al Capone was finally brought down by tax evasion rather than for his more egregious acts, Mozilo didn't cop to any of his really bad acts of predatory lending and mortgage practices by Countrywide, The Huffington Post reports. The Post describes the SEC settlement as covering only the somehow less terrible acts of insider trading and securities fraud. Further, The Post writes that with a fortune of billions, Mozilo isn't being properly punished by a settlement of just over $67 million.

Punished by the SEC settlement or not, The Wall Street Journal reminds readers that the criminal case against Countrywide brought by the U.S. Attorney in Los Angeles is still pending.

Under the settlement, Mozilo acknowledges no wrongdoing.

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